Salespeople are often reluctant to create property management businesses, especially from scratch. Many fail. One couple in Perth faced that challenge.
Andrew Huggins and Amy Waugh have 221 properties in their rent roll, conservatively valued at $1.1 million dollars in today’s market. Two years early, they hadn’t a single property.
As salespeople, they built a remarkable following in their area - some 6kms outside of Perth - and enjoyed a successful three year period as a team producing $500,000 to $800,000 in commission per annum.
Neither Andrew nor Amy had any experience in property management and the prospect of learning was a daunting one. What they did know was one of them would need to take responsibility for the day to day running and driving of that area. Somewhat reluctantly Amy stepped up and accepted the challenge.
In the first six months with most of their efforts on painting, organising accounts, fitouts and generally setting up their new business - Ray White Urban Springs - they accumulated about 20 managements.
“We just started signing them up and figuring it out as we went. When we got stuck we asked for assistance from corporate or one of the colleagues we had met,” Amy said.
Their focus shifted when they realised, six months in, that their 20 properties were worth approximately $120,000. The penny had dropped.
Still not a lot better versed in the art of successful property management they employed an experienced property manager to handle the “management” functions while Amy (amongst other duties) handled the business development role.
It is here that their disadvantage became their advantage. They approached property management as they had their sales business.
“Everything we did in sales we did for property management,” Amy said Exactly as they had in sales they began to prospect for new managements. They made the decision that the office had to drive the prospecting as opposed to the property manager.
Their prospecting included direct mail, phone calls, flyers, bus stop style profile signs and specific targeting. By far the most effective method they discovered was targeting properties as they became vacant.
In prospecting they became aware that landlords were more inclined to consider moving when their property was vacant and not producing an income. They also sent sales letters to other agents listings as a property management prospecting approach. “When someone cannot sell (which was about 60% of listings in the Perth market during 2011) they are potentially interested in renting the property out while they wait it out.”
You can hear Andrew and Amy’s entire story, plus many more, at the Wealth 2012 Conference, 3 - 4 June. Visit wealthconference.com.au